Zenefits - Failure Museum

Zenefits

Zenefits, which made money by acting as a health-insurance brokerage firm for its customers, raised $500 million at a $4 billion valuation only two years after founding. Zenefits employees cheating on the state’s online broker license course led to the CEO’s departure.

Zenefits was a company consumed by impossible growth expectations to grow into its high valuation. Zenefits began hiring people who had little experience with software sales in a highly regulated industry.  To increase revenue, the company moved beyond small businesses to customers with hundreds of employees — and the software struggled to keep up. Instead of pausing to fix bugs, Zenefits simply hired more employees to fill in where the software failed, including repurposing product managers for manual data entry.

There was a laxity about rules and decorum. Zenefits offered beer kegs in its offices, and people freely imbibed during the workday. 

Microsoft Band - Failure Museum

Microsoft Band

In 2016, Microsoft killed its fitness tracker, Microsoft Band, after only two years.   Microsoft touted it as the most advanced fitness tracker on the market, but it was criticized for being awkward and uncomfortable.

Beanie Babies - Failure Museum

Beanie Babies

Excessive greed infected the parent company Ty, who tried to manipulate the market. The company’s efforts eventually contributed to the implosion of the 1990s’ fad. At the peak, more than 60% of American households owned at least one of these babies.

Ty created a sense of exclusivity around Beanie Babies by regularly retiring popular versions and releasing limited editions. Then Ty upped production of newer Beanies in 1999 and in turn tarnished their rarity and value. Demand from collectors fell and Beanie Baby sales plummeted.

Nike Hockey - Failure Museum

Nike hockey

In 2008, Nike viewed hockey as a sport that doesn’t fit into its strategy of developing multi-billion-dollar global properties. It had already written off a sizable chunk of its hockey investment before putting the subsidiary on the market.

Reflect.com - Failure Museum

Reflect.com

In 2005, Procter & Gamble shut down Reflect.com after launching this customized cosmetics business in 1999. To find the right point of customer interaction was one of the largest struggles for Reflect. The company experimented with many different web site layouts, but also with various own store formats. It realized that for a product like cosmetics a pure online version was not enough. Here, an existing retail network may provide a huge advantage.

Sacramento Monarchs - Failure Museum

Sacramento Monarchs

The Sacramento Monarchs were one of the WNBA’s eight original franchises and remain the only professional sports teams to win a championship in Sacramento.  During their time in Sacramento, the Monarchs were one of the league’s most successful WNBA franchises, making the playoffs every year from 1999 to 2008.

The Monarchs’ last season was in 2009 and their complete dissolution occurred after the Maloof Family, who also owned the Kings at the time, decided to no longer operate the franchise. 

The league attempted to relocate the Monarchs to the Bay Area, but a new ownership group wasn’t found and the team ceased operations. 

Reel.com - Failure Museum

Reel.com

Hollywood Entertainment was one of the first brick-and-mortar firms to partner up with a dotcom, purchasing Reel for $100 million in July 1998. Amazon became the leader in video sales in a market which was nearly winner-take-all. This led Hollywood Entertainment to shut down Reel.com in 2000 and focus on its core video rental business.

Nortel - Failure Museum

Nortel

At its height, Nortel accounted for more than a third of the total valuation of all companies listed on the Toronto Stock Exchange (TSX), employing 94,500 people worldwide. Nortel was declared bankrupt in 2009 after almost a decade of financial mismanagement by its executive team. In 2008, three former top executives had been charged with fraud for misrepresenting Nortel’s financial results between 2000 and 2004

Nortel believed the internet to be just a fad and even began developing their own alternative to it. After they failed to begin developing their own internet-based technology, Nortel purchased several other internet-based tech companies who’s stock price drastically declined.  This led to their own stock price plummeting. On top of this, many of the smaller tech companies they had sold their equipment to also went bust meaning they were left out of pocket on those contracts. This cemented a spiral of financial trouble, they couldn’t get out of. 

Loot Crate - Failure Museum

Loot Crate

Founded in 2012, Loot Crate was the most popular subscription box service in the world offering mystery boxes. The features of the boxes, or ‘the loot’, ranged from t-shirts and action figures, to snacks and badges. At the beginning of 2016, Loot Crate made it to the cover page of Inc. Magazine as the fastest-growing private company in the US, with more than 650,000 subscribers. In order to combat competition, Loot Crate offered 27 specific niche crates, such as WWE, Harry Potter, and Star Trek. Although customers loved the new crates, the company was forced to order a wide variety of items in small amounts, instead of doing bulk orders on a few items, reducing the profit margin. After a layoff to improve the profit margin, Loot Crate faced backlash over late box deliveries, bad quality products, and boxes not getting to their destinations at all. In 2019, the company filed for bankruptcy after amassing millions of dollars in debt to companies such as Marvel, Facebook, and Trend Setters.

BetaMax - Failure Museum

Betamax

Introduced in 1975, Sony hoped that the video cassette tape industry and all other manufacturers would adopt the Beta Tape as the standard industry format. Unfortunately JVC, a Japanese-owned rival brand, decided to create their own format, VHS, in 1977. Betamax had a marginally better recording quality and a slightly better sound compared to the VHS, putting it at a higher price tag. However, these differences weren’t all that noticeable to the average consumer, meaning they leaned toward VHS almost every time. Sony also believed that it would be fine to cap Beta Tapes at one hour, but that didn’t work for consumers who recorded sporting events, feature films, or primetime television blocks.